Wachovia falls on dividend and brokerage worries
Wachovia shares briefly fell below $15 Monday on more concerns about the Charlotte bank's financial condition.
An analyst report Monday suggested Wachovia may be in line for another dividend cut. Investors also worried that Prudential Financial Inc. could force the bank to buy back the insurer's share of the companies' brokerage joint venture under a provision effective starting today.
Bank spokeswoman Christy Phillips-Brown declined to comment on what Prudential might do, but she stressed the strength of Wachovia's brokerage business, which offers retail clients advice on stocks, bonds and other investments. Prudential spokesman Bob DeFillippo also wouldn't comment on the insurer's plans but said: “We like our joint venture with Wachovia and that hasn't changed.”
Wachovia and Prudential merged brokerage operations in 2003, operating under the Wachovia Securities name. Wachovia has a 62 percent interest in the venture, while Prudential has a 38 percent stake.
The operation expanded last year when Wachovia acquired St. Louis-based A.G. Edwards Inc., a move that diluted Prudential's stake in the venture. Prudential has previously exercised a provision that gives it until the end of 2009 to decide whether to invest more in the venture to return its stake to 38 percent.
Prudential's DeFillippo noted that if the firm did require Wachovia to buy it out, the bank would have a year to make the payment in cash or stock. The prospect of the buyback was highlighted Monday by the New York Post.
Wachovia shares closed at $15.53, down more than 4 percent. Rick Rothacker
Lazard Middle Market opening Charlotte office
Lazard Middle Market said it is opening a Southeastern office in Charlotte led by a former Wachovia Corp. banker. Scott Smith will be a managing director at the firm, which provides merger and acquisition advice to mid-sized companies. Lazard Middle Market is an indirect subsidiary of investment bank Lazard Ltd. Rick Rothacker
BofA sponsoring a free
Bon Jovi show in New York
Bankers and hair-band fans will unite this summer in New York's Central Park. As part of a Major League Baseball All-star game promotion, Bank of America Corp. will sponsor a free concert by rockers Bon Jovi. Rick Rothacker